High-brightness LED market to grow after flat year in 2001
Better times ahead Despite a flat 2001, Steele estimates that the HB-LED market will grow by around 15% in 2002, and by 20-30% thereafter. This is a healthy growth rate, although it is well below the CAGR of 47% for the five years up to 2000. Further ahead, the market is now projected to reach $3 billion by 2006, which compares with last year s forecast of $3.25 billion by 2005.
LED unit sales increased throughout 2001, but this was offset by a drop in average selling prices, resulting in zero revenue growth. While recession woes were the root cause for the lack of growth, the declining value of the Japanese yen (down by around 11%) had an additional effect to the tune of approximately $80 million in lost revenue, because Japan supplies over half the HB-LEDs worldwide.
Steele notes that providing the economy picks up, recovery is assured because the factors that underpinned the excellent growth in pre-2001 LED markets remain essentially unchanged. "The market was flat in 2001, but that was really in the midst of a high-tech downturn that took semiconductors down 31% and components for use in fiber-optics down by as much as 45%," says Steele. "In this light, flat was a good performance, and to sustain the market overall was a very positive result."
"What I observed is that none of the fundamental driving forces for growth in HB-LEDs have changed at all," continues Steele. "Last year we had a situation where some areas just slowed down." For example, sales of cell phones declined, but sales of white LEDs for use in cell-phone display backlights increased their penetration into this application, and so unit volumes increased.
Steele s report on the HB-LED market was based on a forecast for InGaN-, AlGaAs- and AlInGaP-based devices supplied as standard packaged lamps, surface-mount LEDs or in high-flux packaged devices. For the analysis, Steele chose devices with typical outputs exceeding several hundred mcd, which is much higher than required for standard indicator applications.
Winners and losers HB-LEDs continue to penetrate existing markets and find their way into new applications. Major market sectors include signs that employ monochromatic displays for moving messages and highway information; full-color displays for large video screens; LEDs for interior and exterior lighting applications in cars, trucks and buses; and traffic signals. Other areas are backlights for LCD displays in mobile phones, PDAs and digital cameras, as well as illumination applications such as machine vision and architectural and specialty lighting. The electronic equipment sector includes indicator lamps in industrial and consumer items, such as Sony s PlayStation 2 which uses blue LEDs.
Overall, there was a large variation in the growth rates for these different applications last year. Some areas continued to grow nicely, says Steele, particularly traffic signals and interior automotive lighting (figure 2). Traffic signals grew the fastest at a rate in excess of 100%, although this market is still only 4% of the total. HB-LEDs continue to penetrate automotive applications, a market which grew by 18% year-on-year and now accounts for 26% of the total. The biggest market for HB-LEDs is now backlighting, which grew 11% compared with 2000 and now makes up 30% of the total, up from a 27% share in 2000.
Automotive Automotive applications are already one of the largest markets for HB-LEDs (approximately $310 million in 2001), and there is still considerable potential for growth. Compared with conventional incandescent lighting, LEDs allow new styling options, reduced assembly and rework costs, and offer high reliability. Generally the market can be split into interior and exterior applications.
One of the first HB-LED applications was in exterior center high-mounted stop lamps. Around 40% of the world s cars now feature these lights, which offer greater safety because they are brighter and turn on faster than incandescents. North American car makers lag behind their European competitors, such as VW, BMW, Mercedes and Audi, who have used LEDs in dashboard and interior lighting for some time, and are also beginning to leverage the use of LEDs in their vehicles as a marketing or branding ploy. In the US, some high-end cars such as the Lincoln Navigator use LEDs in the interior, and the entire tail-light section of GM s Cadillac DeVille employs Agilent s transparent-substrate AlInGaP LEDs.
